The Effect of Marketing Mix Factors and Brand Image Toward Customer Satisfaction and Customer Loyalty of Liquefied Petroleum Gas for Household Use ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Journal of ASEAN PLUS+ Studies Vol. 1 No. 1 January-June 2020
The Effect of Marketing Mix Factors and Brand Image
Toward Customer Satisfaction and Customer Loyalty of
Liquefied Petroleum Gas for Household Use in Thailand
Pithoon Thanabordeekij1 and Kanyakan Syers2
Received: May 1, 2020/ Revised: May 22, 2020/ Accepted: June 17, 2020
Abstract
The purpose of this study is to examine the relationship between
the marketing factors (Product, Price, Place, and Promotion), brand image
and customer satisfaction towards customer loyalty on Liquefied Petroleum
Gas (LPG) for household use in Thailand. The quantitative question-
naires were approached by using linear regression analysis to confirm
the results. Survey data were collected from 400 customers who have
experiences toward delivery and usage of LPG cooking container. The
study results suggested that the product dimension of the marketing
factors, brand image, and customer satisfaction had a positive influence
on customer loyalty. The result of this study would enable businesses
to identify marketing strategies in order to enhance customer satisfaction
and loyalty in the LPG cooking gas industry in Thailand.
Keywords: Marketing Mix, Brand Image, Customer Satisfaction,
Customer Loyalty, LPG Cooking Gas
Introduction
LPG, known as Liquefied Petroleum Gas, is a mixture of hydrocarbon gases. It produces
during natural gas processing and oil refining. We cannot deny that LPG played a revolutionary
role in changing the way domestic fuels such as firewood and charcoal are used for heating and
cooking. The market of LPG has continuously been expanding. According to the ministry of
energy Thailand, there are three main sources of supply of LPG in Thailand:
1. From an oil refinery
2. From Gas separation plants (GSP)
3. From the imported gas in the form of Propane gas and Butane gas
In 2014, LPG used in Thailand mainly was from GSP, 50 percent, follows by imported,
26 percent, and oil refinery, 24 percent. The LPG consumer record from Energy Policy and
Planning Office (EPPO) indicated that the consumption of LPG and propane for cooking from
2005 to 2015 has been rising by 31 percent. Meanwhile, the consumption of LPG and propane
for the industry in the same period has been rising by 29 percent. LPG has been proven to be
cost-effective, convenient, and environmentally friendly.
In Thailand, there are four major LPG cooking gas suppliers which comprise of PTT
PCL (held the largest market share of 48%), followed by WP Energy PCL (18.2%), Unique
Gas and Petrochemical PCL (11.16%), and Siamgas and Petrochemical PCL (9.22%)
1
Faculty of Economics, Chiang Mai University
2
Faculty of Business Administration and Information Technology, Rajamangala University of Technology Isan,
Khon-kaen Campus
Email: pithoon.th@cmu.ac.th
~ 35 ~Journal of ASEAN PLUS+ Studies Vol. 1 No. 1 January-June 2020
(Bangkokbiznews, 2017). Also, the LPG in the cooking gas segment is under the government's
price control, which led to slightly or indifference in LPG price among each supplier. Therefore,
the suppliers need to develop marketing strategies to satisfy their consumers and uphold the
brand image to gain customer satisfaction and customer loyalty in a competitive environment.
Research Objectives
This study investigates how the marketing mix (4Ps) and brand image influence customer
loyalty on LPG cooking gas for household use in Bangkok, Thailand.
Literature Review
The marketing mix factors
The marketing mix factors (Kotler & Keller, 2016) consist of product, price, place, and
promotion. The 4Ps of the marketing are briefly described as follows (Copley, 2004): Product dimension
refers to the item or service being marketed, through its features, quality, benefits, functionality,
after-sale services; Price dimension refers to the price of the item, discounts, payment methods;
Place dimension refers to the location where the product or service is available to the customer,
including distribution channels, logistics, order processing; Promotion dimension refers to advertis-
ing, direct marketing, public relation (PR), sales promotions. It is widely used by researchers
to analyze the combination of tactics used by a business to achieve its objectives by marketing
its products or services effectively to its target consumers ( Chartered Institute of Marketing
(CIM), 2004). Marketing mix also helps to define the marketing elements for successfully
positioning market offer and helps to develop the satisfaction (Cengiz & Yayla, 2007; Shahhos-
seini & Ardahaey, 2011; Suprihanti, 2011).
Customer re- purchase behavior is estimated as a primary requisite for loyalty, followed
by satisfaction (Punniyamoorthy & Raj, 2007; Chang & Tu, 2005). Pritchard, Havits & Howard
( 1999) claimed that understanding why customers become loyal is vital in business as it will
become a development of a strategy for business providers to perform and deliver excellent
services and products to the customers. Business providers, with a clear understanding of the
marketing mix, can attract both potential and current customers to become loyal customers
(Wahab et al., 2016).
Brand Image
Brand image is the perception of how a customer views the brand. Keller ( 1993)
expressed that brand image is a sign that consists of all the information and expectation-related
to product and service based on customer perception. The brand image is also defined as the
ability of a potential customer to identify and remember a brand as a member of a specific
product category (Aaker, 1997).
Porter & Clycomb (1997) stated that businesses could increase their competitive advantage
with a positive brand image as well as encourage consumers to re- purchases and become loyal
customers. Number of studies also indicated that brand image has a direct influence on customer
satisfaction customer loyalty (Eakuru & Mat, 2008; Ogba & Tan, 2009; Tu et al., 2012).
Customer Satisfaction and Loyalty
Customer satisfaction is defined as a customer’s feeling, such as enjoyment or disappointment
that results from comparing a product’ s perceived performance to a particular expectation
( Oliver, 1981; Brady & Robertson, 2001) . Lee ( 2004) stated that customer satisfaction on
a company’ s performance determines their retention. While customer loyalty is defined as “a
feeling of attachment to or affection for a company’s people, products, or services” (Jones & Sasser,
1995).
~ 36 ~Journal of ASEAN PLUS+ Studies Vol. 1 No. 1 January-June 2020
A satisfied customer is likely to be a loyal customer. Consequently, loyal customers are
pleased to spend more with strong purchase intentions and hardly switching brands
(Evanschitzky et al., 2012). Thus, businesses need to strengthen their relationship with the customers
to sustain a competitive advantage in the competitive environment (Aksoy, 2013).
Previous researches and Findings
Vinayagamoorthy, Sankar & Sangeetha ( 2007) researched “ Study on Service Quality
Perception of Domestic LPG”, stated that the service quality played an essential role in the
competitive market. With well-established consumer service management, it is the key to succeeding
in the competitive market. The study revealed that customers are not highly satisfied with the
service provided by the Indane gas company. Therefore, the Indane gas company has to improve
its service quality to stay competitive.
Vimal & Karthihaiselvi ( 2010) in their study, “ Customers’ opinion towards Indane gas
dealers”, found that customers are concerned about a delay in providing a cylinder. It is suggested
that there should be one more dealer in Sivakasi to distribute the gas cylinder quickly. With the
rising demand for the Indane gas because of convenience to use, cleanliness, cost, and time-saving,
the dealer should provide better customer service to have repeated orders, increased sales, and
eventually sustainable development.
Dhanabhakyam & Sumathi (2014) in their article entitled, “A Study on Customers Attitude
and Satisfaction towards HP LPG in House Hold, Coimbatore”, stated that the consumers have
a positive attitude towards referring others to buy the HP LPG. However, the HP Gas Company
is suggested to improve its service quality, such as the customer care area, proper communication
while booking and delivery through short message service (SMS).
Research Framework 9
Figure 1 presents the conceptual framework for this study.
Figure 1 Research Framework
~ 37 ~Journal of ASEAN PLUS+ Studies Vol. 1 No. 1 January-June 2020
Hypotheses
Hypotheses are stated as follows:
H1: The marketing mix 4P’s positively influences customer satisfaction.
H2: The marketing mix 4P’s positively influences customer loyalty.
H3: The brand image positively influences customer satisfaction.
H4: The brand image positively influences customer loyalty.
H5: Customer satisfaction positively influences customer loyalty.
Methodology
The quantitative approach was used in this research. The target population of this study
was a household consumer in Bangkok who has experiences toward delivery and usage of LPG
cooking container to a household in Sai Mia district. The Department of Provincial Administration
reported that, in 2016, the Sai Mia district was the highest population in Bangkok; the total
number of registered residents was around 200,000 people. Using Taro Yamane’s sample size
calculation ( Yamane, 1973) to determine the sample for this study, the calculated value was
400 respondents.
Elements in the questionnaire were derived from the available literature review. Necessary
modifications were made to make it suitable for the Thailand context. Three items each for
Marketing Mix factors were selected from previous marketing mix studies. Five items each for
Brand Image, Customer Satisfaction, and Customer Loyalty were adapted from the available
literature. Five- point Likert scales with the range of “ strongly disagree” ( 1) and “ strongly
agree” (5) will be used to measure in this study based on the marketing mix, customer satisfaction,
and loyalty. The survey was designed with screening questions about experiences toward delivery
and usage of LPG cooking containers at the beginning of a survey to determine whether
respondents are eligible to participate.
The reliability of questionnaires was tested by using the internal consistency method,
which is known as Cronbach’ s alpha. It was introduced by Kuder & Richardson ( 1937) for
dichotomous data, then generalized by Cronbach (1951). In this study, Cronbach’s alpha was
used to test internal consistency for all four Marketing Mix dimensions, Brand Image, Customer
Satisfaction, and Customer Loyalty. Cronbach’ s score range from 0 to 1, with values close to
1 indicating high consistency. George & Mallery (2003) provided the following rule of thumb:
“≥ 0.9 – Excellent, ≥ 0.8 – Good, ≥ 0.7 - Acceptable, ≥ 0.6 – Questionable, ≥ 0.5 – Poor and ≤
0.5 – Unacceptable”.
This study's questionnaires were accepted for internal consistency, as all the values were
above 0.7 (Cronbach, 1951). Cronbach’s alpha value was from 0.871 to 0.947, as shown in
Table 1.
Table 1 Mean, Standard Deviation, and Cronbach’s Alpha Scale Reliability
Variables Mean S.D. α (n=400)
Product 3.66 0.875 0.871
- LPG cylinder is always in a condition 3.68 1.005
- This supplier has various sizes of LPG cylinder 3.68 0.971
- The certification of the Thai Industry Standard Institute is 3.57 0.983
visible on the cylinder.
~ 38 ~Journal of ASEAN PLUS+ Studies Vol. 1 No. 1 January-June 2020
Table 1 Mean, Standard Deviation, and Cronbach’s Alpha Scale Reliability (Cont.)
Variables Mean S.D. α (n=400)
Price 3.64 0.837 0.871
- The price offering by this supplier is reasonable. 3.56 0.899
- The delivery fees are flexible and reasonable. 3.70 0.998
- There is clear information for fees/charges. 3.70 0.953
Place 3.65 0.901 0.892
- The location of the store is close to your home. 3.58 0.959
- The supplier offers various channels to place an order. 3.67 0.990
- The supplier offers a fast delivery service. 3.72 1.046
Promotion 3.64 0.916 0.908
- The promotions are well informed. 3.63 0.970
- The staffs have the knowledge to answer customer’s quetions 3.67 1.003
- The supplier offers various channels for making a payment i.e., 3.64 1.005
cash, e-payment, credit card.
Brand Image 3.50 0.896 0.917
- The design of this brand's ads is well done. 3.55 0.992
- This brand always has what I’m looking for. 3.60 0.979
- The store environment of this brand appeals to me. 3.31 1.075
- This brand is responsible for me. 3.47 1.078
- This brand is responsible for society. 3.60 1.043
Customer satisfaction 3.63 0.809 0.866
- This supplier provided excellent quality of product and service. 3.61 0.859
- I am happy about my decision to use LPG cooking gas from 3.64 0.905
this supplier.
- I am happy to recommend this supplier to others. 3.62 0.924
- I believe I did the right thing when I use LPG cooking gas 3.61 0.922
from this supplier.
- Overall, I am satisfied with my decision to use LPG cooking gas 3.66 0.892
from this supplier.
Customer Loyalty 3.42 0.858 0.947
- I intend to continue using products and services from this 3.42 0.938
supplier for a long time.
- I am willing to say positive things about this supplier to other 3.34 0.957
people.
- I have bought from this supplier for several years because they 3.33 0.967
offer satisfactory services.
- To me, this supplier can provide the best service. 3.40 0.957
- Overall, I will be a loyal customer. 3.59 0.937
Source: Author’s calculation
Results
Demographical profile of respondents
From the respondents’ demographics were classified as gender, age, average monthly
income level, number of family members, and occupation. Based on the results, the majority
of the respondents were female, which consist of 56. 50 % of the sample size. Respondents
aged between 18- 30 years old represented the largest age group, 38. 50% , followed by aged
~ 39 ~Journal of ASEAN PLUS+ Studies Vol. 1 No. 1 January-June 2020
between 31-40 years old, 26.50%. Besides that, 50% of respondents’ average monthly income
was between 15,001 Baht to 30,000 Baht, with the majority working for private organizations.
Moreover, the majority of respondents had family members between 3 to 4 persons, 59%.
Relationship of relevant variables and research hypothesis
Table 2 Summary of Testing Hypothesis
Hypothesis
No. Hypothesis Path β t-value p-value
Supported
H1a Product → Satisfaction 0.238** 5.203 0.000 Yes
H1b Price → Satisfaction 0.063 1.052 0.294 No
H1c Place → Satisfaction 0.159** 2.571 0.010 Yes
H1d Promotion → Satisfaction 0.198** 3.317 0.001 Yes
H2a Product → Loyalty 0.181** 3.574 0.000 Yes
H2b Price → Loyalty 0.078 1.170 0.243 No
H2c Place → Loyalty 0.127 1.856 0.064 No
H2d Promotion → Loyalty 0.110 1.654 0.099 No
H3 Brand Image → Satisfaction 0.211** 3.317 0.001 Yes
H4 Brand Image → Loyalty 0.290** 4.702 0.000 Yes
H5 Satisfaction → Loyalty 0.789** 25.648 0.000 Yes
** significant at 0.01
Source: Author’s calculation
Based on the finding of Table 2, the results showed that Product, Place, and Promotion
dimensions had a positive impact on customer satisfaction of LPG for household use. Product
dimension represented the most substantial influence on customer satisfaction ( β = 0. 238) ,
followed by promotion (β = 0.198), and Place (β = 0.036), whereas Price Fairness dimension
indicated positively affect but insignificant. Meanwhile, only the Product dimension (β = 0.181)
had a positive influence on customer loyalty. The Brand image also showed a positive impact
on customer satisfaction and loyalty.
Discussion and Conclusion
The main objective of the study was to investigate the marketing mix (4Ps), brand image,
and customer satisfaction toward customer loyalty in the LPG cooking gas in Bangkok. It is
undeniable that customer satisfaction plays an essential role in determining the success of the
business. By assessing the marketing mix dimensions and brand image, the LPG cooking gas
supplier can design effective marketing strategies to meet consumer voices and enhance their
loyalty.
The findings indicate that the product dimension had the most substantial impact on customer
satisfaction and loyalty. Customers are looking for different sizes of the cylinder that fit their
lifestyle. By offering the product that fits customer need, it will encourage them to be a loyal
customer. Additionally, management should focus on providing good quality LPG cylinder
condition and conform to safety standard for household use. LPG cylinder without rusts,
dents, or loose paint can enhance consumer’s confidence in buying LPG cooking gas. The
positive impact is not only on gaining consumer’s confidence in buying but also on brand
image. Chang & Tu ( 2005) identified that customer satisfaction directly impacted by brand
image. Chitty, Ward & Chua (2007) concluded that the band image played a dominant role in
~ 40 ~Journal of ASEAN PLUS+ Studies Vol. 1 No. 1 January-June 2020
predicting customer satisfaction. A good brand image can enhance customer experience and
satisfaction, which led to customer royalty and commitment (Ike-Elechi & Zhenzhen, 2009).
The location also has an impact on customer satisfaction, which aligned with Marinez-Ruiz,
Jiménez- Zarco & Yusta, 2010. The store should be located not too far from populated
residential areas and conform to safety regulations. It also should be visible and easily accessible.
Besides, all associated costs (transport costs and time spent on the road) with purchases will be
reduced as well, which leads to increased customer satisfaction. Fox, Postrel & McLaughlin (2007)
indicated that consumers who lived closer to a store spend more, vice versa. Also, by offering
various channels to place an order and guarantee delivery within 30 minutes, these would be
a plus to gain customer satisfaction.
Additionally, the communication between businesses and their customers indicates had
a positive impact on customer satisfaction, which similar to the finding of Charles, Tino & Bill
(2005) and Yue (2013). With the variety of communication channels both offline and online, customers
can access to product safety information, short video clips on “how-to” instruction, make a payment
through various methods, tracking the delivery, as well as leave feedback about service or
product.
Hence, it is essential to pay attention t o customer satisfaction so the business can be
sustained in the competitive market. It is crucial for active businesses in expanding new
customers and to maintain their loyalty.
Acknowledgments
This research was supported by Chiang Mai University. Research would like to thank all
cited experts that contribute to this study. My sincere thanks are extended to all respondents
that devoted their valuable time for answering the questionnaires as well.
References
Aaker, D. ( 1997) . Should You Take Your Brand to Where the Action Is? Harvard Business
Review, 75(5), 135-43.
Aksoy, L. (2013). How do you measure what you can’t define? The current state of loyalty
measurement and management. Journal of Service Management, 24(4), 356-381.
Bangkokbiznews. ( 2017) . Buoyant LPG race traders boil. Retrieved May 12, 2016, from
https://www.bangkokbiznews.com/news/detail/767436 [in Thai]
Brady, M. & Robertson, C. (2001). Searching for a consensus on the antecedent role of service
quality and satisfaction: An exploratory cross national study. Journal of Business
Research, 51(1), 53-60.
Cengiz, E. & Yayla, H. E. ( 2007) . The Effect of Marketing Mix on Positive word of Mouth
Communication: Evidence from Accounting Offices in Turkey. Innovative Marketing,
3(4).
Chang, C. & Tu, C. ( 2005) . Exploring Store Image, Customer Satisfaction, and Customer
Loyalty Relationship: Evidence from Taiwanese Hypermarket Industry. Journal of
American Academy of Business, 197-202.
Charles, D., Tino, F. & Bill, M. (2005). Sale the 7 Cs: teaching/training aid for the (e-)retail.
International Journal of Retail & Distribution Management, 33(3), 179-193.
Chartered Institute of Marketing (CIM). ( 2004) . Strategic Marketing in Practice. Cookham,
England: Chartered Institute of Marketing.
Chitty, B., Ward, S. & Chua, C. (2007). An Application of the ECSI Model as a Predictor of
Satisfaction and Loyalty for Backpacker Hostels. Marketing Intelligence & Planning,
563-580.
~ 41 ~Journal of ASEAN PLUS+ Studies Vol. 1 No. 1 January-June 2020
Copley, P. ( 2004) . Marketing Communications Management: Concepts and Theories, Case
and Practices. London: Elsevier Butterworth-Heinemann.
Cronbach, L. J. ( 1951) . Coefficient alpha and the internal structure of tests. Psychometrika,
16(3), 297-334.
Dhnanabhakyam, M. & Sumathi, T. (2014). The SIJ Transactions on Industrial. Financial &
Business Management, 2(2), 48-57.
Eakuru, N. & Mat, N. K. N. (2008). The application of structural equation modeling (SEM) in
determing the antecedents of customer loyalty in banks in South Thailand. The Business
Review, Cambridge, 10(2), 129-139.
Evanschitzky, H. , Ramaseshan, B. , Woisetschläger, D. M. , Richelsen, V. , Blut, M. &
Backhaus, C. ( 2012) . Consequences of customer loyalty to the loyalty program and
to the company. Journal of the Academy of Marketing Science, 40(5), 625-638.
Fox, E. J. , Postrel, S. & McLaughlin, A. ( 2007) . The impact of retail location on retailer
revenues: An empirical investigation. Working paper, Cox School of Business, Southern
Methodist University.
George, D. & Mallery, P. (2003). SPSS for Windows step by step: A simple guide and reference. 11.0
update (4th ed.). Boston: Allyn and Bacon.
Ike-Elechi, O. & Zhenzhen, T. (2009). Exploring the image of brand image on customer loyalty
and commitment in China. Journal of Technology Management in China, 4(2), 132-144.
Jones, T. & Sasser, W. ( 1995) . Why satisfied customers defect. Harvard Business Review, 73
(November–December), 88-99.
Keller, K. (1993). Conceptualizing, Measuring, and Managing Customer-Based Brand Equity.
Journal of Marketing, 57(January), 1-22.
Kotler, P. & Keller, L. K. (2016). Marketing Management. (15th ed.). USA: Pearson.
Kuder, G. F. & Richardson, M. W. (1937). The theory of estimation of test reliability. Psychometrika,
2, 151-160.
Lee, S. ( 2004) . College student's perception and preference of brand name food services in
university dining operations. Unpublished master's thesis, Oklahoma State University,
Stillwater.
Marinez- Ruiz, M. , Jiménez- Zarco, A. & Yusta, A. ( 2010) . Customer Satisfaction’ s Key
Factors in Spanish grocery stores: evidence from hypermarkets and supermarkets.
Journal of Retailing and Consumer Services, 17, 278-285.
Ogba, I. E. & Tan, Z. (2009). Exploring the impact of brand image on customer loyalty and
commitment in China. Journal of Technology Management in China, 4(2), 132-144.
Oliver, R. ( 1981) . Measurement and evaluation of satisfaction processes in retail settings.
Journal of Retailing, 57(3), 25-48.
Porter, S. S. & Claycomb, C. (1997). The influence of brand recognition on retail store image.
The Journal of Product and Brand Management, 6, 373-384.
Punniyamoorthy, M. & Raj, P. M. (2007). An empirical model for brand loyalty measurement.
Journal of Targeting, Measurement and Analysis for Marketing volume, 15, 222-233.
Shahhosseini, A. & Ardahaey, F. T. (2011). Marketing mix practices in the cultural industry.
International Journal of Business and Management, 6(8), 230.
Siamgas. (2015). Siamgas Annual Report of 2015 Form 56-1. Retrieved May 12, 2016, from
http://www.siamgas.com
Suprihanti, A. (2011). The Effect of Services to Customer’s Loyalty (Case Study of Kentucky
Fried Chicken Restaurant at Galleria Mall Yogyakarta). The 2nd International
Research Symposium in Service Management, 2011(7), 26-30.
The National Statistical Office of Thailand (NSO). (2015). The number of households in Bang-
kok. Retrieved May 12, 2016, from http://www.mict.go.th [in Thai]
~ 42 ~Journal of ASEAN PLUS+ Studies Vol. 1 No. 1 January-June 2020
Tu, Y. T., Wang, Ch. M. & Chang, H. C. C. ( 2012) . Corporate Brand Image and Customer
Satisfaction on Loyalty: An Empirical Study of Starbucks coffee in Taiwan. Journal
of Social and Development Sciences, 3(1), 24-32.
Vimal, J. P. & Karthihaiselvi, V. ( 2010) . Opinion of Customers about Dealers’ Service in
Indane Gas – A Study with Special Reference to Sivakasi Town. International Journal
of Enterprise and Innovation Management Studies, 1(3), 117-122.
Vinayagamoorthy, A., Sankar, C. & Sangeetha, M. (2007). Study on Service Quality Percep-
tion of Domestic LPG. Abhinav National Monthly referred to Journal of Research in
Commerce & Management, 1(10), 134-148.
Wahab, N. A., Hassan, L. F. A., Shahid, S. A. M. & Maon, S. N. (2016). The relationship
between marketing mix and customer loyalty in the hijab industry: The mediating
effect of customer satisfaction. Procedia Economics and Finance, 37(16), 366-371.
Yamane, T. (1973). Statistic: An Introductory Analysis (3rd ed.). New York: Harper and Row.
Yue, L. (2013). Comparative study of Jingdong Mall and JUMEI’s cosmetics marketing strategy.
Master Thesis Business Administration, Tsinghua University.
~ 43 ~You can also read
